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There is no official word on the actual reason for replacing Terrence Howard from the second installment of the movie. Nonetheless, there are some speculative reasons, which were doing rounds in the industry about his departure or better say eviction from Iron Man 2 and the main thing which kept coming was..
Contract Negotiation
According to Entertainment ...

Showing Tony's infatuation with Hot Rods is a very efficient storytelling tool. And through show-not-tell you can immediately deduce that:
Tony loves to tinker with machines.
Lives life in the fast lane.
Has oodles of money (and time) to spare on pet projects.
He has a very obsessive (and possessive) personality.
All of these are core to the character of ...

Well, I don't remember the scene exactly, but I'm pretty sure, that this was meant rather sarcastic.
Latin is really not an easy language and has a rather complex grammar. Besides that it's not really spoken in everyday life anymore and only read from ancient texts or used in quite specialized contexts (law and medical terms, recitated prayers), but not ...

I would personally think that this is a subtle reference to the type of person that Tony Stark is, he is what would commonly be referred to as a 'Hot-Rod' in that he has a firey temper and is quite reckless in his life.
Also, it gives him the inspiration for the colour of the Iron Man suit.

Stark Expo occurs in Flushing Meadows, New York which you could drive to D.C. in a few hours. Tony does live in Malibu as displayed in the movie as well as for Hammer Industries which is in Queens, NY.
Source: http://www.starkexpo2010.com/ and http://marvel-movies.wikia.com/wiki/Stark_Expo
Stark Expo was filmed in L.A. Live, Downtown, Los Angeles, ...

Its due to Huge pay cut as rumor suggest and even due to role cut as indicated in @Incognito's answer.
Here are Howard's reaction on the removal from Iron Man 2-
"Marvel made a choice, and it was a very, very bad choice. They didn't
keep their word. They didn't honor my contract," Howard tells Parade
magazine. "They produced a great bounty with the ...

I think it's surely the "show, don't tell" aspect of his ingenuity and hobby. It shows us his probable rebellious past, maybe his first car. And since he's so mechanically inclined, the car probabbly portrays this side of Stark in a raw unrefined form of his past self. Hot Rodders are always tinkering with their cars and the deep cultural history behind Hot ...

Tony's central concern with the government's attempts to appropriate the Iron Man armor was borne out of their intentions with the program: To weaponize the technology, and to create an army of the machines.
Having being a former arms manufacturer, Tony is well aware of the Military Industrial Complex embedded within US politics; and having been enlightened ...